Represented two brothers who were each left only $100,000 under their mother’s 2004 Will. Under their mother’s prior wills, each of the three brothers was to receive one-third of their mother’s estate.... We filed a will contest action on behalf of our clients seeking to set aside the 2004 Will and two subsequent codicils to the will on the basis they were the result of undue influence exerted by their youngest brother and their mother’s third husband. A claim was also brought against the clients’ other brother for intentional interference with inheritance seeking to recover farm income from an irrevocable trust set up in 1998.
After a 6-day jury trial, the jury returned a verdict finding the 2004 Will and 2015 codicil invalid as a result of undue influence. The jury also found in our favor on the intentional interference claim awarding our clients each $125,000. After the verdict, the parties reached an agreement where DBSH clients received a combined $3.1M from their mother’s estate.
Litigation
In re Estate of Milton Boman
Feb 08, 2017
OUTCOME: $2.2M Jury Verdict and Affirmed on Appeal
Represented a brother against his two sisters relating to their parents estate. The brother farmed with his father for most of his adult life. The sisters, who grew up on the farm, married and moved el...sewhere. In 1997, the parents executed a revocable living trust under which the brother and one of the sisters were to split the parents’ assets. The other sister had disclaimed any share in the trust at that time, believing that she was “sufficiently provided for by her husband.”
Conflict began between the siblings around the time the price of Iowa farmland was reaching record heights. As the parents aged, the father began suffering from dementia and the mother encountered serious health problems. The brother continued to operate the farm with his father, and he assisted his parents with medical and business decisions. In 2008, the sisters joined the brother as joint attorneys in fact for their parents. The sisters made the decision to move the parents to an assisted living center 110 miles from the farm. The sisters then assumed the role of caretaker.
From 2008 through 2011, the relationship between the brother and his sisters and parents deteriorated. The sisters accused the brother of stealing his father's machinery, of being a freeloader, and of using drugs. The sisters did not speak to the brother from 2008 forward. They also encouraged the parents to modify the trust several times, each time reducing the value of the brother's inheritance, ultimately culminating in its revocation in 2011. During the time changes were made, the sisters were involved with communications and meetings with the parents attorney. At that time, the parents executed mutual wills leaving their property to the sisters and disinheriting the brother completely. The mother died in 2012, and the father died in 2013. The sisters kept the father’s death “completely confidential,” and the brother did not hear of it until after a private funeral.
The will was admitted to probate nine days after the funeral, and the brother sought to have it invalidated on the grounds of undue influence and lack of testamentary capacity. He also sought damages for tortious interference with inheritance. After an eight-day trial, the jury returned a verdict in the brother’s favor. The jury found that the will should be set aside on the grounds of undue influence. The jury also found in favor of the brother on his tort claim, awarding him $1,183, 430.50 (or one-half of his parents’ gross estate) in actual damages, $295,857.62 in consequential damages, $118,343.05 in punitive damages from one sister, and $59,171.53 in punitive damages from the other sister. The court awarded the brother $445,454.75 in attorney fees.
The Iowa Court of Appeals upheld the judgment. The court found that a reasonable jury could have concluded that the sisters sought to obtain a power of attorney and move the parents away from the brother to increase their influence over their parents. The court also found that the jurors, who were responsible for assessing the credibility of the witnesses, believed that the sisters did not act in good faith when they made regular reports to the parents about their brother. The sisters reported that the brother was again using illegal drugs, that he had stolen his parent’s machinery, and that he had taken advantage of his parents financially and emotionally. The sisters did not speak to the brother during this time and did not attempt to acquire solid facts regarding their disparaging remarks. The court ruled that substantial evidence supported the jury’s conclusion that the parents had clearly disinherited the brother because of the sister’s interference.
Finally, the court found that the brother had shown “actual malice” on the part of his sisters, so as to support punitive damages. The court noted the sisters’ “callous, intentional decision” to keep the father’s death a secret from the brother--even though the brother had farmed with his father for more than 30 years—thereby preventing the brother from attending his father’s funeral.
Business
Bernice Gill vs. Bill Vorhes and Vorhes, LTD.
Jul 27, 2016
OUTCOME: Affirmed on Appeal
In Gill v. Vorhes and Vorhes, Ltd., No. 15-0785 (July 27, 2016), the Iowa Court of Appeals decided a shareholder derivative suit in favor of the shareholder that brought the suit for the corporation.
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Vern and Irene Vorhes incorporated Vorhes, Ltd.; all interest in the corporation ultimately transferred to their children, Pete, Bill, Bernice, and Jean.
In April 2011, Bernice’s counsel sent a letter to Bill and Jean, the only other living shareholders, president and vice president, demanding that the corporation collect debts owed by Bill. The letter stated that if the corporation failed to act, Bernice would pursue a shareholder derivative suit. Vorhes, Ltd. took no action.
In September 2011, Bernice filed a shareholder derivative suit against Bill, for unpaid rent and outstanding debts. Bill answered with affirmative defenses. Over two years later, on the eve of trial, the corporation moved to dismiss, alleging that Bernice did not supply an affidavit as required by Rule 1.279. The trial court denied the motion.
On the second day of trial, the parties entered a written stipulation, admitting that Vorhes, Ltd. loaned Bill money which remained unpaid, and that Bill owed the corporation for funds paid on Bill’s behalf. The remaining disputes were: farm rent from March 2000 forward; whether Bernice was entitled to attorney’s fees for bringing the derivative suit; and Bernice’s claim that the corporation be reimbursed for attorney’s fees that were loaned to Bill to defend the suit. At trial, Bill claimed that his mother relieved rent payment by two handwritten notes. The trial court found in favor of Bernice, and Bill appealed.
On appeal, the appellate court first ruled that even though Bernice was unable to speak because of a stroke, the corporation was adequately represented by counsel. Bernice was never deposed or listed as a witness, or subpoenaed.
The Court of Appeals also rejected the argument that Bernice’s failure to include an affidavit was fatal. Bill did not file a motion to dismiss, raise the deficiency in his answer, or join Vorhes, Ltd.’s motion to dismiss. Vorhes, Ltd. did not pursue the argument on appeal. Thus, Bill did not preserve the issue for appeal. Further, there was “substantial compliance” with Rule 1.279. Bernice had standing to bring the action; made a written demand; and filed suit more than ninety days after the demand, as the Code required. No “useful purpose would be served by dismissing this action more than two years after suit was filed and on the eve of trial based on a lack of a supporting affidavit.”
Regarding Bill’s claim that his mother relieved his lease payments, the handwritten documents did not support his position. Unclear on their face, it would be unnecessary to have two documents which permanently relieved Bill from paying rent. Also, Bill made no reference to either document until relatively late in the litigation. Further, the documents were unenforceable for lack of consideration; Vorhes, Ltd. gained nothing of benefit, and there was no detriment to Bill. Thus, neither document was given the effect that Bill urged at trial.
The corporation argued that no attorney’s fees were available, because of 2013 amendments to Iowa Code section 490.746. The amended section was part of, “An Act Relating to Nonsubstantive Code Corrections and Including Effective Date Provisions.” Thus, the amendments were nonsubstantive. Also, the amendments added a new subsection, stating, “‘[e]xpenses’ means reasonable expenses of any kind that are incurred with a matter.” Thus, the court continued to have authority to award reasonable attorney’s fees, if the proceeding resulted in a substantial benefit to the corporation. As Bernice obtained a substantial benefit for Vorhes, Ltd., an award of $90,000 of fees was reasonable. Also, Bill owed Vorhes, Ltd. $45,000.00 for attorney’s fees incurred regarding the claim for unpaid rent.
